What Is Public Liability Insurance?

Public liability insurance is a type of insurance that protects individuals and businesses from legal expenses arising out of bodily injury, damage to property, or death. Public liability insurances are regulated by governments in order to promote fairness between the insured and their insurer.

Third-party claims, such as those made by consumers, for injury or property damage caused by the insured firm are covered by public liability insurance. In most cases, public liability only covers injury and property damage claims that occur at the business’s physical site.

What is Public Liability Insurance and How Does It Work?

The purpose of public liability insurance is to protect companies against claims filed by the general public. Because it’s liability coverage, it’ll pay for the insured business’ legal defense, settlements, court expenses, and damages if someone claims they were harmed on the premises or their property was damaged by the firm.

What Is Covered by Public Liability Insurance?

Public liability insurance covers a company’s liability expenses for third-party bodily injury and property damage claims, as long as the incident that triggered the claim occurred at the company’s physical site.

As an example of physical harm, a customer strolling through your shop has a piece of product fall on them, causing a head injury, and makes a claim alleging that your company is at fault. Any medical expenditures incurred as a result of the injury would be covered by the insurance. The coverage would also cover defense expenses, court fees, settlement costs, and damages if you were sued for extra damages.

As an example of property damage, imagine you own a coffee shop and a client walks in carrying a valuable pocketbook. While they’re eating, one of your employees falls and spills coffee all over her pocketbook. Damages to that purse would be covered by the public liability coverage.

What Doesn’t Public Liability Insurance Cover?

Physical and bodily injuries, as well as property damage, are all covered by public liability insurance. This is significant because, in addition to physical injury and property damage claims, general liability insurance would cover personal and advertising harms such as slander, libel, or false arrest.

Public liability insurance is also confined to a business’s physical location, so if a claim is made claiming a person was wounded on the covered business’s premises, it will only compensate the insured business. For example, if an electrician injures a client while working at their house and files a claim, the insurance will not cover the incident since it occurred off-premise.

Another limitation of public liability insurance is that it only covers claims brought by third parties, such as customers or members of the general public. This implies that claims for injury or property damage made by a company’s workers, as well as those made by the company’s owner, would not be covered.

The following are some of the most common claims that are not covered by public liability insurance:

• The personal and advertising injury component of general liability insurance covers reputational damage.
• Workers’ compensation insurance covers employee injuries.
• Injuries caused by goods or surgeries that have been completed: Covered by general liability insurance’s product-completed operations component or separate product liability insurance.
• Professional liability insurance covers claims of professional malpractice.
• Liquor liability insurance covers injuries caused by intoxication.

Insurance for General Liability vs. Insurance for Public Liability

Both general and public liability insurance plans are company liability coverages that would pay for legal defense, court expenses, settlement, and damages if a third party filed a bodily injury or property damage claim against you. The key distinctions are found in the details.

General liability insurance is more costly for a firm to obtain, but it provides greater coverage. For example, public liability insurance does not cover reputational damage or product liability claims, but the general liability insurance does.

In addition, general liability insurance does not apply when a third party is hurt or their property is destroyed. If a company employee injures someone at their house, general liability insurance will pay the claim, but public liability will not since the harm occurred outside of the firm’s physical site.

Typical Commercial Liability Claims

Public liability insurance can be a low-cost insurance option, especially for customer slip-and-fall injuries, which are Typical Commercial Liability Claims.

Costs of Public Liability

The cost of public liability insurance is quite low, with minimum premiums beginning at roughly $500 per year and ranging from $500 to $1,600. Due to coverage limits, public liability insurance is generally roughly 10% less expensive than general liability insurance in different sectors.

The size of the physical site, firm revenues, and operational hazards in terms of how many people pass through the premises are all major variables in public liability insurance prices. Other characteristics unique to the insured, such as claims history, coverage limitations, and the deductible amount chosen, will all influence the pricing.

Average Costs of Public Liability Insurance by Industry

Although general liability coverage is more costly, The Hartford can guarantee that you obtain top-of-the-line protection at a low cost by adding add-ons to the policy for professional liability, internet-related advertising liability, and data breach coverage.

Who Should Get Public Liability Insurance?

Finally, public liability insurance should be obtained only by firms that need to save money, provided that the same company has largely on-premises risks and little exposure to prospective personal or advertising claims. Overall, firms with physical sites will benefit more from this coverage.

The following are some of the finest business kinds for which public liability insurance is appropriate:

• Restaurants
• Coffeehouses
• Stores
• supermarkets
• Hotels, motels, and bed & breakfasts
• Laundry services

Conclusion

Public liability insurance is a low-cost alternative to general liability insurance for businesses. Public liability insurance can protect your company against third-party claims for personal injury or property damage, even if the coverage isn’t as comprehensive. This means that in the case of a claim, you won’t have to pay for legal defense, court, settlements, or legal damages out of your own pocket.